Note To Obama: $250,000-a-Year Earners Can’t Afford Jets

By

Robert Frank

Jun 29, 2011 2:01 pm ET

President Obama has a new term for the people he wants to tax more: jet owners. In his news conference today, the president said: “I think it’s only fair to ask an oil company or a corporate jet owner that’s doing so well to give up that tax break….I don’t think that’s real radical.”

(Courtesy of JetSuite Air)

Asking private-jet owners to give up tax breaks may not be that radical. And it probably would be supported by the vast majority of the nonjet-owning voters. The problem is that most of the people that would be subject to higher taxes the president wants aren’t likely to be private-jet owners. Someone earning $250,000 a year–among those scheduled for a tax increase in 2012–is unlikely to afford a jet–or even a few charter trips on a jet.

For those, like the president, who may not be well-versed in Jetonomics, here are some of the basics. The numbers come courtesy of Jay Duckson at Central Business jets:

COSTS OF CHARTERING A JET Typical charter–$3,000 an hour It is possible, of course, that someone earning $250,000 a year might spend 5% to 10% of their annual income on a single flight by chartering, in which case we could call them “corporate-jet fliers.” But it is unlikely. Even more unlikely is someone earning $250,000 a year paying $500,000 to $1 million a year to operate a jet–even if they received it free.

According to Mr. Duckson and others, most of those who own their own jets have net worths of $100 million or more and earn more than $10 million a year–minimum.

The President may be right that is fair to tax private-jet owners. He may even be right that it is fair to raise taxes on those earnings more than $250,000 a year.

But the only kind of jet owned by people earning $250,000 a year would be the kind that sits on your desk. How rich do you think you have to be to own a jet?

CLARIFICATION: An earlier headline stated that “Obama Calls People Making $250,000 ‘Jet Owners.’” While his comments referred to the Democratic effort to close a tax loophole for jet owners, known as “accelerate depreciation,” the jet comment is part of the administration’s broader efforts to raise taxes on the wealthy, defined as those making $250,000 or more.